Jan. 31 (Bloomberg) -- It’s time to revisit that economic
indicator in the clouds, that architectural gauge of vanity,
that quirky harbinger of doom -- the Skyscraper Curse.

I last dragged it out two years ago as Dubai, site of the
world’s tallest building, crashed right on cue. It was but the
latest reminder of the uncanny correlation between edificial
one-upmanship and crisis. Almost without fail, cities or nations
that open the globe’s latest record-breaking structure implode.

Dubai’s turn came in 2009, as it put the finishing touches
on the gleaming Burj Dubai, a 2,684-foot (818 meters)
monstrosity without rival. Dubai unraveled like clockwork, as
did Kuala Lumpur in 1997 with the twin Petronas Towers, Chicago
in 1974 with the Sears Tower and New York in the 1930s with the
Chrysler and Empire State buildings. Long before that there was
the Tower of Babel of biblical legend.

Who’s next? Either Japan or China -- take your pick.

Recently, Andrew Lawrence, an analyst at Barclays Plc in
Hong Kong, dusted off the high-rise index with a warning about
China. It’s home to almost half of all skyscrapers being erected
around the world, a boom that points to excessive investment
that may end badly. China’s bubbles deserve more attention.

Let’s not forget Japan, which last week saw its credit
rating slashed to the same level as China. You would think
earthquake-prone Tokyo would avoid constructing the world’s
tallest anything. Nope, the 2,080-foot Tokyo Sky Tree tower is
continuing apace. When completed this year, it will top China’s
Canton Tower, at 1,435 feet.

Misallocated Capital

It won’t come close to challenging the supremacy of the
Burj Dubai, yet the project has all the hallmarks of the
economic overreach that tends to end in tears. Tokyo, remember,
is zero-interest-rate central. The Bank of Japan leaving the
monetary floodgates open this long inherently leads to
misallocations of capital and a false sense of stability.

Look, there’s nothing scientific about all this. Yet in a
world as uncertain as ours, where many of the normal economic
goalposts no longer apply, eccentric indicators are worth a
look.

The thing about record-breaking structures is that they
often say as much about arrogance as they do about wealth,
ambition and technology. In Japan’s case, for example, free
money breeds complacency as well as bubbles. Zero rates gave
politicians the idea they could issue debt forever without
consequence.

Monumental Debt

Those days are over, as Standard & Poor’s reminded Japan
last week by cutting its rating to AA-, the fourth-highest
level. Still, the fact remains that as Tokyo construction crews
finish their ode to architectural excess, the government has
built up a monumental debt load that smacks of hubris.

Asia, in general, has a case of skyscraper-itis. According
to Frankfurt-based Emporis.com, the region is home to 3,808 of
the world’s 7,559 completed skyscrapers, compared with 2,586 in
North America. The key is not to overdo it. Is it too late?

The waves of hot money sluicing into Asia are fueling
questionable bets that may end terribly. In China, investment in
real estate development reached 4.3 trillion yuan ($653 billion)
in the first 11 months of last year. That’s greater than
Turkey’s annual gross domestic product.

Politicians and developers are often both optimists and
gamblers. Ambition and excess get so fused together that they
forget where one ends and the other begins. Japanese politicians
put their nation’s future on a credit card, believing their
methods of fiscal management would avert crisis. The bill is now
coming due. A Greece-like crash isn’t the best-case scenario,
but then neither can one be ruled out.

Japan’s Denial

Denial pervades in Tokyo. A day after S&P’s downgrade,
investors got excited about data showing deflation eased a touch
in December and unemployment edged lower. It’s a bit like a
doctor saying: Aside from the cancer eating away at your core,
your health is looking better. Aging Japan’s mix of debt and
demographics is nothing less than toxic.

Observing Yosano’s reaction, I was reminded of what former
Finance Minister Masajuro Shiokawa said in 2002, the last time
S&P failed to understand and downgraded Japan. He called the
credit rating company “selfish.” Also in 2002, the Finance
Ministry sent a letter to S&P, Moody’s Investors Service and
Fitch Ratings charging that their decisions on Japan “lack
objective criteria.”

Nine years later, the developed-market country with the
world’s largest debt is lucky credit rating companies have been
so generous. Yes, Japan is rich, has trillions of dollars of
household savings and a bond market that keeps virtually all
public debt onshore. Its fiscal trajectory, though, is dismal.
The only thing regrettable here is that politicians aren’t
getting the message.

Talk about a towering display of denial. Even if you think
the logic behind the Skyscraper Curse is shaky, concerns about a
Japanese debt crash are based on solid foundations.

(William Pesek is a Bloomberg News columnist. The opinions
expressed are his own.)